JSE may struggle for direction on Wednesday as Netflix crashes
US corporate earnings have been generally positive, but Netflix lost a quarter in after-hours trade after reporting dismal subscriber growth
The JSE looks set to contend with a mixed Asian session on Wednesday morning, with investors digesting US corporate news and contemplating the implications of Russia’s new offensive in Ukraine.
There has been an almost 80% earnings “beat” thus far in the US corporate earnings season, helping to lift US markets overnight, National Australia Bank’s head of foreign exchange strategy, Ray Attrill, said in a note. Whether that can survive the big Netflix “miss” reported just after the close is in question, he said.
Netflix reported its first drop in subscribers in a decade, and in after-hours trade its share fell more than a quarter.
War, floods and Covid-19
Markets were also contemplating news that China’s central bank has opted to keep its lending rate unchanged, disappointing those hoping for a cut as the country continues to grapple with Covid-19. Russia has also started a new offensive in Ukraine, a conflict that has prompted the International Monetary Fund (IMF) to cut its global growth outlook for 2022 to 3.6% from 4.4%.
In morning trade, the Shanghai Composite was down 0.21%, while the Hang Seng rose 0.82% and Japan’s Nikkei 0.68%.
Tencent, which often gives direction to the JSE through Naspers, gained 1.1%.
Gold was down 0.35% to $1,943.13/oz, while platinum lost 1.36% to $977. Brent crude was 0.61% higher at $107.76 a barrel.
The rand was flat at R14.94/$, but fell almost 2% on Tuesday, briefly trading above the R15/$ for the first time in about a month.
Locally, SA is battling with load-shedding and the fallout from floods in KwaZulu-Natal and the Eastern Cape, with sugar group Tongaat Hulett reporting shortly before markets closed on Tuesday that production had fallen almost 10% in its year to end-March, with operations now affected by flooding.
Domestic focus on Wednesday will be on consumer inflation figures for March, with a slight acceleration to 5.8% expected amid climbing fuel and food prices.
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